Business EconomyPosted at: Nov 13 2025 1:46AM


Air passenger growth to be at 4.3 per cent in FY26: CARE Ratings

Chennai, Nov 12 (UNI) Credit rating agency CARE Ratings expects lower growth of 4.3 percent in the air traffic passengers numbers this fiscal. In its latest report CARE Ratings said it anticipates passenger traffic to reach about 430 million passengers in FY26, revised from its earlier estimate 445 million passengers.
“The downward revision reflects the impact of cross-border tensions in Q1 FY26, lower aircraft availability due to fleet-wide inspections following the fatal aircraft accident in June 2025, and delay in arrival of wide-bodied aircrafts that dampened passenger traffic growth during the first half of the fiscal year,” Palak Vyas, Associate Director said.
“Over the medium term, with passenger traffic expected to grow at a CAGR of 8-9percent, the outlook for the airport sector is favourable. However, timely delivery of wide-bodied aircraft shall remain monitorable for growth in international traffic,” Vyas added.
In H1FY26, total passenger traffic grew 2.6percent YoY to 202 million passengers, compared with 197 million in H1FY25 (7.4 percent YoY growth). Domestic traffic recorded muted growth of 1.6percent, while international traffic continued to exhibit stronger momentum with 6.9percent growth.
For the entire fiscal year, CARE Ratings forecasts domestic passenger traffic to increase by about 3.5percent, while international traffic is expected to grow by about 8percent.
The latter half of FY26 is projected to see improved performance, driven by the festive season and the commencement of two new greenfield airports, which are expected to ease supply constraints and boost overall traffic growth, the credit rating agency said.
Over the next 2-3 years, the airport sector's outlook is favourable, with CARE Ratings forecasting passenger traffic to grow at a Compound Annual Growth Rate (CAGR) of 8–9percent. International traffic growth is expected to surpass domestic traffic growth, aligning with previous estimates. The outlook is supported by airport and airline capacity expansions, as well as robust air travel demand fuelled by favourable demographics and a rising middle-class population.
Maulesh Desai, Director said: “Despite lower passenger growth, the financial risk profile of airport players is expected to remain healthy with aggregate aero revenue for 11 assessed airports estimated to reach about Rs.11,000-11,500 crore during FY26 registering a healthy y-o-y growth of about 50percent.
The net leverage is expected to improve below six times from FY27 onwards, as against earlier expectations of FY26 owing to lowering of passengers estimate. Regulatory mechanisms involving true-up of revenues in case of shortfall besides longer concession periods continue to impart financial flexibility to Indian Airports.”
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